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Old 04-30-2009, 03:16 PM
 
Location: Lake Wylie, SC
299 posts, read 983,256 times
Reputation: 102

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Hi Again,

I have been reading at the DMV website about the property tax charged on vehicles. I don't think I quite understand it:

1. It says it's in lieu of state sales tax... does this mean you don't pay sales tax on a car when you purchase it?

2. Is this an annual property tax, or a one time tax when you register the car for the first time?

3. It says 3% of the purchase price... but how do they tax new-comers to the state. It says based on vehicle value up to $150. My car is 8 years old. My husband's car is 1 yr old. When we move to NC, how do they assess teh value of the vehicles??? We have to pay this tax even though we paid sales tax on the vehicles when we purchased them??

4. Is the vehicle property tax deductible on your income tax return? (ie. CA allows you to claim your registration fee as a deduction because they base their registration costs on the value of the vehicle.)

I've never lived in a state that charges a vehicle property tax... just trying to understand this.

Thanks

Pam
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Old 04-30-2009, 04:04 PM
 
Location: NE Charlotte, NC (University City)
1,894 posts, read 5,952,641 times
Reputation: 1044
1. I bought a new (used) truck in July of last year, so I should know this! If I'm not mistaken, there was no tax at the sale...at least not like what you may be used to in other states. For instance, in FL, depending on your county, you could expect an additional 6-7% added on at the sale for tax. Here, I don't remember being hit with that, but there may have been some small ($100-200) tax type of fee. Not certain...and I have no clue where my bill of sale thing is with all the charges on it.

2. Yes, it is annual. You get a bill about 3 months after you renew your tags every year (so if you renew in August, you'll get a property tax bill around November due probably in December). And yes, you also get hit when you register for the first time. It's typically less than what you pay for the yearly property tax (I believe there's a maximum that they can charge for this first time registration).

3. You're taxed the first time you register. It's based on the year, make, model, and mileage of the vehicle. Again, I think there's a cap...$150 sounds right. And yes, you have to pay the tax even though you paid sales tax in another state. One small downside of moving.

4. Yes, it's deductible from your federal income tax return. I did it this year and it certainly helped lower the amount owed.
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Old 04-30-2009, 04:10 PM
 
Location: Lake Wylie, SC
299 posts, read 983,256 times
Reputation: 102
Metallisteve,

Thanks for the quick reply. So, if the max for out-of-state newbies is $150, does that mean since the cars were purchase and used (for more than 90 days) out of state, they can never-for-as-long-as-I-own-the-cars charge more than $150? Or does that mean that it will be $150 when we first move, but next year, it will be based on depreciated value of the car?

I mean, purchase price of my newer car was $18,800. 3% tax on this would be $564!! So, next year, will the state charge me 3% of some depreciated value... say 3% of $17,000, for example?

I would venture to say this is WORSE than the way California does their vehicle registration fees. OUCH!
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Old 04-30-2009, 04:15 PM
 
Location: The 12th State
22,974 posts, read 60,736,162 times
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Quote:
Originally Posted by SilverSagess View Post
Metallisteve,

Thanks for the quick reply. So, if the max for out-of-state newbies is $150, does that mean since the cars were purchase and used (for more than 90 days) out of state, they can never-for-as-long-as-I-own-the-cars charge more than $150? Or does that mean that it will be $150 when we first move, but next year, it will be based on depreciated value of the car?

I mean, purchase price of my newer car was $18,800. 3% tax on this would be $564!! So, next year, will the state charge me 3% of some depreciated value... say 3% of $7,000, for example?

I would venture to say this is WORSE than the way California does their vehicle registration fees. OUCH!
no that is a highway Use tax it a one time deal and isnt a property tax
You will get billed 3 months after purchase for property tax and the rate varies from county to county
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Old 04-30-2009, 04:24 PM
 
Location: NE Charlotte, NC (University City)
1,894 posts, read 5,952,641 times
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The way I remember it (this is going back 2 years now), you're hit with like a "welcome to NC" tax at the first registration of your out of state vehicle. Only this fee has a max value. A few months following this initial registration, you'll get your yearly vehicle property tax bill which is calculated based on the vehicle's value. I don't know what the 3% thing is. They valued my truck at like $22k and I paid something like $360 this year...so that's about 1.6%.

I found this link. It explains the Highway Use Tax that is charged one time up front when either purchasing a new car or registering an out of state vehicle. The way I read it:
- 3% is charged to new in state purchases OR out of state registers that have been owned less than 90 days
- 3% (up to a max charge of $150) is charged for all out of state registrations that are owned for more than 90 days

This "HUT" one-time tax is different than the vehicle property tax (assessed and collected by your county). Here is a brief description of this yearly tax. I can't find anywhere that clearly lists the percentage.
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Old 04-30-2009, 05:27 PM
 
Location: Lake Wylie, SC
299 posts, read 983,256 times
Reputation: 102
Ah... Now I see. I didn't realize that I was talking about 2 different taxes/fees.

Let's see if I got this straight... The HUT is 3% on new purchases or up-to-$150 cars owned/registered for more than 90 days in another state. This is a ONE TIME fee.

Then there is a property tax that is assessed EVERY year. But it's not 3%!!! Thank goodness!! Now it is sounding very similar to how they did things in California.

I think I get it now. Thank you
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Old 04-30-2009, 10:18 PM
 
1,350 posts, read 3,440,766 times
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The taxes you pay on your vehicles is tax deductible?!?!?!?
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Old 04-30-2009, 10:24 PM
 
Location: Mint Hill, NC
769 posts, read 2,048,265 times
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Quote:
Originally Posted by SilverSagess View Post
Ah... Now I see. I didn't realize that I was talking about 2 different taxes/fees.

Let's see if I got this straight... The HUT is 3% on new purchases or up-to-$150 cars owned/registered for more than 90 days in another state. This is a ONE TIME fee.

Then there is a property tax that is assessed EVERY year. But it's not 3%!!! Thank goodness!! Now it is sounding very similar to how they did things in California.

I think I get it now. Thank you
I'm paying more than twice per year what I was paying for registration on my car in California. 'Course that may have changed now with the changes California has been making to fees, etc.

The main difference I saw was that California based the valuation on what I PAID for the car - and I'd gotten a really good deal. Here in NC it's a percentage of the Kelly Blue Book HIGHEST value.
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Old 05-01-2009, 05:22 AM
 
Location: Lake Wylie, SC
299 posts, read 983,256 times
Reputation: 102
Ouch... KBB Highest Value? That hardly seems fair. But I am realizing, as I mentioned in a different post that I made, that everything seems like it will even out. While we will have to pay property tax on the vehicles, property taxes on homes are very low. While electric bills may be higher, gas wills will definitely be lower. Etc.

SSD3... you probably have to itemize your deductions on your tax return in order to deduct the tax, but yes, it should be tax deductible.
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Old 05-01-2009, 06:32 AM
 
Location: NE Charlotte, NC (University City)
1,894 posts, read 5,952,641 times
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Quote:
Originally Posted by ssd3 View Post
The taxes you pay on your vehicles is tax deductible?!?!?!?
Yep! And as mentioned, it's when you itemize...so if you don't have a lot of other deductions (enough to get you over your normal default deduction), it may not help. For me, it helped significantly...two cars with a total of about $600 tax bill.
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